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Trading Desk Market Update: 1/18

January 18, 2022

BTC is currently trading around $41,400 and ETH around $3,100.  Notable gainers in the last 24 hours are TFUEL, ETC, and MINA.  The global crypto market cap is $2.08T, down 3.8% over the last day.  DeFi Total Value Locked is ~$215b and BTC dominance is around 40%.

Crypto prices continue to fall amidst lingering fears of central bank tightening and weak institutional demand.  Indeed, the Crypto Fear & Greed Index remains in Extreme Fear, while digital asset investment products saw record outflows of $207m last week, per CoinShares.  Meanwhile, crypto derivatives data remains lackluster, with futures open interest well below last year’s peak and perpetuals funding rates hovering around zero.   And in options, implied volatility has fallen to two-year lows, which doesn’t suggest crypto markets expect a major event to push prices out of recent ranges.  Though much of the IV selling has been attributed to covered call DeFi vaults, which may just argue for structurally lower vol over time compared to history.

Notable news today includes: Malaysia’s central bank is actively assessing its CBDC options; South Korean regulators are set to test the AML capabilities of the nation’s four biggest crypto exchanges; The UK Treasury released a paper proposing to remove the terms blockchain and DLT from the definition of cryptocurrencies; Microsoft announced the acquisition of major game developer Activision Blizzard; and, over 20m people have now downloaded the PBoC’s digital yuan app.

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